Property Report: As temperatures rise, so does rural market confidence

Calvin Leen: Market heats up in South Canterbury

New Zealand’s rural real estate market is seeing renewed interest, particularly in the dairy sector, following Fonterra’s strong payout forecast. Calvin Leen, PGG Wrightson Real Estate’s North Otago, South and Mid Canterbury Sales Manager, says buyer confidence is building in key regions like Mid Canterbury, where record prices are being achieved.

“Since the forecast announcement of $10 per kgMS, we’ve seen a growing depth in the buyer pool, especially in central Mid Canterbury,” Leen explains. “In particular, we recently saw a record price set at $63,000 per hectare, which eclipses the previous record of $61,000 in Hinds.”

Demand is also extending to dairy support blocks, which have historically been hard to come by. Leen describes these properties as “like hen’s teeth,” though renewed confidence in the payout has driven fresh interest. “Over the last 12 months, inquiry had been limited, but that’s starting to shift. We now have a couple of offers on properties that have been on the market for over a year, and those offers are stacking up well in terms of value,” he says.

In contrast, the sheep and beef sector remain subdued, with limited activity for larger-scale properties. “Buyer interest is sluggish,” says Leen. “Where buyers are engaging, they’re seeing value at 10 to 15 percent below where farms were trading per stock unit over the past 24 months.”

Meanwhile, the arable farming sector is showing positive momentum, particularly in Mid Canterbury, where land-use consents for dairy support are driving value. “A number of arable properties have worked through the consenting process in recent years, which has added value and made them increasingly sought after from dairy operators,” Leen says. He points to a recent sale in Chertsey (ASH40381), where an arable property was purchased for large-scale dairy support.

Heading into the summer months, dry conditions in South Canterbury are beginning to take their toll, with Leen noting a run of 30-degree days. While recent rainfall was welcomed, further moisture is needed, particularly further north. Overall, Leen is optimistic about the year ahead, citing the positive movement in the dairy and arable sectors as key drivers for renewed confidence in New Zealand’s rural real estate market.

Whether you’re considering buying or selling rural property, now might be the right time to explore your options. With renewed confidence in key sectors and evolving opportunities across the market, your local PGG Wrightson Real Estate team is well-placed to provide guidance tailored to your needs. A conversation with one of their experienced agents could offer valuable insights as you plan your next move.

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